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Half of all transactions this year could be without a mortgage

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Tue 11 Aug 2015

Half of all transactions this year could be without a mortgage

Some half of all transactions this year could be without a mortgage.

According to Lloyds, just 155,000 households buying with a mortgage moved home in the first six months of this year – 9% fewer than the 171,700 in the first half of last year.

The latest figure for mortgaged home movers – ie, those moving from one owned property to another – ­ is less than half the 327,600 at the market peak in the first half of 2007. It is, however, almost a third higher than in the depths of the recession in 2009.

The figures for mortgaged first-time buyers have also declined, standing at 135,000 during the first half of this year, down 10% on the same period last year. First-time buyer numbers peaked at 190,000 in 2006.

The statistics are all from Lloyds Bank.

If the bank’s calculations are correct, it means that just 290,000 home moves were made in total in the first half of this year, where purchasers needed a mortgage.

If the figure were to be replicated in the second half, then there will have been under 600,000 mortgages advanced overall for home purchase this year.

With the Council of Mortgage Lenders currently predicting just over 1.2m transactions this year, it would mean that less than half of all buyers do not need a mortgage to make a move.

Lloyds mortgages director Andrew Mason said: “Whilst the number of home movers has risen significantly since 2009, it remains well below previous levels and has recovered less strongly than first-time buyer numbers.

“This is likely to partly reflect the high costs associated with moving home, as well as highlighting the difficulties that home owners can face in finding somewhere suitable to move to due to the shortage of properties available for sale.”

Separate figures from the Land Registry show that sales of homes costing over £1.5m stood at 2,026 in the first half of this year – down from 3,044 in the comparative period last year.

The drop follows last December’s Stamp Duty Land Tax reforms which benefit buyers of cheaper properties at the expense of dearer ones.

In other research, Experian has shown that moving from a starter home to a larger family property is increasingly out of reach.

In 265 out of 276 UK towns, the difference in the average three- or four-bedroom home costs half as much again as a starter property.

The gap is widest in Scotland and the south-east. For example, in Farnham, Surrey, or High Wycombe, Bucks, a one- or two-bedroom home costs around £225,000, but one with three or four bedrooms costs very nearly double.